Week 17 2017

Week 17 2017

24 April – 28 April

24 April

Even in a good day for European markets, Greek bonds are shining. The country’s main traded 10-year bond has rallied to its best level since 2014 today – pushing the yield to its lowest since before the election of its current left-wing government after Athens smashed through one of its key bailout targets.

US small-capitalisation stocks have once again begun to widen the performance gap against their larger counterparts, highlighting the recent revival of the “Trump trade”.

Becton Dickinson, the New Jersey-based medical technology company, has agreed a $24bn cash and shares deal to buy Bard, a healthcare equipment manufacturer, and will borrow heavily to finance the deal.

International Airlines Group, the owner of carriers British Airways and Iberia, is stepping up its digital investment by taking stakes in two technology start-ups following its first accelerator programme.

25 April

The world economy is improving. The question is how strong and long-lasting this improvement will be. The recovery could disappoint, last for a time or mark the beginning of a period of rapid and sustained growth. The last seems the least likely outcome. But failure is not predestined.

Gold is expected to remain under pressure in the near term, according to Goldman Sachs as the investment bank holds its three-month target at $1,200 per ounce.

Jimmy Choo, which rose from humble origins in a Hackney cobblers workshop to become one of Britain’s best-known fashion brands, is up for sale after struggling to retain the cachet it held in the early 2000s.

The EU’s Solvency II insurance rules have failed to give investors a clear picture of insurers’ financial health, according to new research. The regime, which was introduced last year, was supposed to make it easier for investors to evaluate insurers and to compare companies across European borders.

26 April

James “Jamie” Selway, US head of execution services at agency broker ITG, is the front-runner to lead the division of trading and markets at the US Securities and Exchange Commission, according to people with knowledge of the matter.

Emmanuel Macron seems to have one foot in the Élysée Palace after the first round of France’s presidential election. Would his victory over the National Front’s Marine Le Pen in 10 days’ time also allow Mario Draghi to declare that the eurozone has taken a big step towards full health

“We’re not like other banks.” So claims the best known “challenger” to Britain’s big four, ever keen to show that “There’s Money . . . and there’s Virgin Money”. Indeed, for Virgin Money customers, there are no branches, only “stores” and comfortable “lounges”, where you can “relax with complimentary refreshments, read newspapers and use our iPads”. Its staff “aren’t incentivised on sales — just providing the best service they can”. Its not-for-profit fundraising website, Virgin Money Giving, has helped charities collect £500m. “We may be a bank,” it says, “but we’re not a bunch of bankers.”

Uber is looking to the skies with plans for a flying taxi venture after being brought to earth by a series of management problems. The ride-hailing service says it will demonstrate flying vehicles by 2020 in Dubai and the Dallas-Fort Worth area, with full-scale operations by 2023. It is forming partnerships with aircraft companies including Embraer to make its vision a reality.

27 April

President Donald Trump’s top economic team unveiled what they called the biggest tax cut in US history, proposing a sharp reduction in corporate taxes and a simplification of individual rates they said would unleash economic growth.

The Bank of Japan kept monetary policy on hold at its April meeting, but has upgraded its growth outlook and kept inflation forecasts relatively unchanged. The BoJ kept its policy rate steady at minus 0.1 per cent and stuck to its pledge to keep 10-year bond yields around zero, as expected by economists.

While the US is breaking population records, states such as Illinois and West Virginia have lost people in recent years. Something similar is happening in the US crude oil futures market. Even as it surpasses 2bn barrels in total, certain precincts have quietly thinned out.

Dow Chemical, the US group that is in the midst of a $150bn merger with rival DuPont, reported earnings for the first quarter that easily came in ahead of analysts expectations, sending shares higher in pre-market trading.

28 April

South Korean industrial production came in lower than expected in March, despite quarterly economic growth for the country having accelerated on the back of an uptick in manufacturing activity and export growth.

A rise in prices for utilities and petroleum industry services saw wholesale inflation in Australia rise at its quickest pace in 15 months during the first three months of the year.

“Sell in May and go away” is not just a cliché. Soon it could be an exchange traded fund. Those of us who dream of having a stock market index named after us are a little jealous right now of Sam Stovall, chief investment officer at research firm CFRA. After years of taking calls from clients at this time of year asking if they should follow the old market adage, he has turned his advice into an index. An ETF that tracks the CFRA-Stovall Large Cap Seasonal Rotation index cannot be far behind.

Airline stocks were grounded on Thursday after American Airlines unexpectedly offered to hike wages for its crew members, spooking investors who were already on the edge over the renewed costs and labour pressure seen in the industry.

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